Diversified media and entertainment company Walt Disney Co. (DIS) said Tuesday after the markets closed that its first quarter profit remained essentially flat with last year, as restructuring charges offset a slight increase in revenue. However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly revenue.
The Burbank, California-based company reported net income for the first quarter of $844 million or $0.44 per share, compared to $845 million or $0.45 per share for the year-ago quarter.
The company recorded restructuring and impairment charges totaling $105 million in the latest quarter mainly related to organizational and cost structure initiatives at its Media Networks and Studio Entertainment segments.
The restructuring and impairment charges and a gain on the sale of an investment in a television service in Europe together had a net adverse impact of $0.03 per share on earnings in the latest quarter. The year-ago quarter results included a gain on the sale of the company's investment in two pay television services in Latin America, which benefited earnings by $0.04 per share.
Excluding items, earnings per share for the first quarter increased to $0.47 from $0.41 in the prior year quarter.
On average, 20 analysts polled by Thomson Reuters expected the company to earn $0.38 per share for the first quarter. Analysts' estimates typically exclude special items.
Segment operating income for the quarter rose 9% to $1.58 billion from $1.44 billion a year earlier.
Revenue for the first quarter increased 1% to $9.74 billion from $9.60 billion in the same quarter last year. Seventeen analysts had a consensus revenue estimate of $9.66 billion for the first quarter.
First quarter revenue from the company's media network segment increased 7% year-over year to $4.18 billion, while the segment's operating income rose 11% to $724 billion.
Operating income at cable networks for the quarter increased $27 million to $544 million, driven by growth at the worldwide Disney Channels and ESPN. First quarter operating income at Broadcasting increased $42 million to $180 million mainly due to the absence of a bad debt charge in connection with the bankruptcy of a syndication customer in the prior-year quarter and higher revenues from ABC Studios productions driven by increased third party network license fees and international sales of Criminal Minds.
First quarter revenue from parks and resorts were essentially flat at $2.7 billion but segment operating income decreased 2% to $375 million. The results reflect weakness at Disneyland Paris, partially offset by strength at the company's U.S. operations.
First quarter revenue from the company's studio entertainment division remained essentially flat essentially flat with year-ago quarter at $1.9 billion but the division's operating income increased 30% to $243 million.
Consumer Products revenues for the quarter fell 3% to $746 million and the division's operating income declined 8% to $243 million.
Interactive Media revenues for the quarter dropped 29% to $221 million and the division's operating loss narrowed to $10 million from $45 million a year earlier.
"We are pleased with our first quarter results and are excited about our creative pipeline, from upcoming movies like Alice in Wonderland and Toy Story 3 to new attractions at our Parks and Resorts," said Robert Iger, Disney President and CEO.
Disney completed its acquisition of character franchise company Marvel Entertainment Inc. in late December. Under the deal, Disney acquired ownership of more than 5,000 Marvel comic-book characters, including Iron Man, Spider-Man, X-Men and Captain America.
The company also effected an executive overhaul during the quarter. The company's former chief financial officer, Tom Staggs, and the head of its parks and resorts division, Jay Rasulo, swapped jobs. The company also appointed Rich Ross, President of Disney Channels Worldwide, as Chairman of Walt Disney Studios.
The company achieved a significant milestone in November, when it received approval from the Chinese government for its theme park in Shanghai. The company had been pursuing the proposal for about 20 years. China is often tough when it comes to approvals for operations of foreign companies in its soil. Time Warner (TWX) and News Corp. (NWS, NWSA) also have been trying hard to make their presence felt in the world's biggest emerging economy, but with little success.
Last week, News Corp. (NWS: ,NWSA) last week reported a profit for the second quarter over a net loss last year, due to double-digit revenue growth at majority of its business segments, as well as the absence of hefty impairment and restructuring charges recorded in the previous year. The company also increased its quarterly dividend by 25%.
Also last week, Time Warner Inc. (TWX) reported a profit for the fourth quarter, compared with a loss last year that included a heavy loss from discontinued operations and asset impairment charges. The company also raised its regular quarterly cash dividend by 13.3%.
Disney shares, which have traded in a range of $15.14 to $32.75 over the past year, closed Tuesday's regular trading session at $29.84, up 36 cents or 1.22%. The stock is currently gaining 6 cents in after hours trading.
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